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January 02, 2019

Top Stories of 2018: #6 to #10

After reflecting upon the events of the past twelve months, Patent Docs presents its 12th annual list of top patent stories. For 2018, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Yesterday, we counted down stories #15 to #11, and today we count down stories #10 to #6 as we work our way towards the top five stories of 2018. As with our other lists (2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2018" on January 16, 2019 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

10. Does Unsettled § 101 Jurisprudence Preclude Attorneys' Fees

In December, in SAP America, Inc. v. InvestPic, LLC, the Northern District of Texas awarded $679,420.46 in attorneys' fees to SAP America after the Federal Circuit affirmed an earlier decision of the District Court finding InvestPic's '291 patent invalid under 35 U.S.C. § 101. SAP America was successful in its attempt to obtain attorney's fees based on a supposedly weak litigating position under § 101. However, since Alice v. CLS Bank, just about any patent involving software or a business method can have its validity challenged under § 101. Moreover, not even the federal courts have been able to crack the § 101 egg. It is well-known that multiple federal judges have commented on the record that Alice was hard to apply in practice. In addition, Judge Wu of the Central District of California criticized Alice for setting forth an "I know it when I see it" test. Judge Pfaelzer, a colleague of Judge Wu, wrote that the Supreme Court's patent-eligibility cases "often confuse more than they clarify [and] appear to contradict each other on important issues." In July, in Interval Licensing LLC v. AOL, Inc., the Federal Circuit's Judge Plager wrote that the post-Alice § 101 inquiry "renders it near impossible to know with any certainty whether the invention is or is not patent eligible." And these are just a few examples of judicial confusion. There are more. For example, in September, in Gust, Inc. v. AlphaCap Ventures, LLC, the Federal Circuit ruled 2-1 that § 101 jurisprudence was too murky to be used as the basis of an attorney's fees award. Writing in a concurring-in-part and dissenting-in-part opinion, Judge Plager concluded:

This emperor clearly has no clothes; we need not wait for our children to tell us this. The legitimate expectations of the innovation community, as well as basic notions of fairness and due process, compel us to address this § 101 conundrum.

In July, the Federal Circuit handed down an en banc decision in NantKwest, Inc. v. Iancu, regarding the question of whether under 35 U.S.C. § 145 an applicant must pay the U.S. Patent and Trademark Office's attorneys' fees as part of the "expenses" the statute mandates, regardless of whether the applicant won or lost the case. The District Court had rejected the Office's argument that it was entitled to recover attorneys' fees (and other expenses), and a divided panel of the Federal Circuit reversed the District Court's decision and ordered payment of the Office's fees. The Federal Circuit chose to review the panel's decision sua sponte, and the en banc Federal Circuit affirmed the District Court's decision, over a spirited dissent, holding that the Office was not entitled to its attorneys' fees in appeals under § 145.

8. Supreme Court to Decide Whether Government Can File Petitions for Post-Grant Review

In October, the Supreme Court granted certiorari in Return Mail, Inc. v. U.S. Postal Service, in order to answer the question whether the government can bring post-grant review proceedings under the Leahy-Smith America Invents Act (AIA). Specifically, the Supreme Court agreed to review whether the government is a "person" under the AIA, as is required to file a petition seeking the institution of AIA review proceedings. The case began with Return Mail seeking to license its '548 patent, which claims methods, computer programs, and systems for processing undeliverable or returned mail, to the Postal Service. Instead of licensing the '548 patent, however, the Postal Service filed a petition for ex parte reexamination with the U.S. Patent and Trademark Office. The USPTO instituted the reexamination proceeding, but eventually confirmed the validity of the patent. Return Mail then filed a complaint against the Postal Service in the Court of Federal Claims. While that action was pending, the Postal Service filed a petition seeking the institution of covered business method (CBM) review of the '548 patent. Return Mail opposed the institution of the CBM review​ on both substantive and procedural grounds, including that the Postal Service lacked standing to file a CBM petition. Both the PTAB and a majority of the Federal Circuit panel hearing the appeal found that the Postal Service satisfied the requirement that it be a "person." The Supreme Court granted certiorari on the issue of whether the government is a "person" in the context of the AIA's CBM proceeding. Thus, by the middle of next year, we should know whether government agencies are "persons," permitted to bring AIA proceedings.

7. Supreme Court: PTAB Must Render Final Written Decision on All Challenged Claims

In April, the Supreme Court reversed the judgment of the Federal Circuit in SAS Institute Inc. v. Iancu, with Justice Gorsuch (joined by the Chief Justice and Justices Kennedy, Thomas, and Alito) providing a textual explication of the inter partes review (IPR) statute in deciding that the U.S. Patent and Trademark Office was compelled to render a Final Written Decision (FWD) on all claims challenged by a petitioner in its IPR petition. This decision overruled the Patent Office's practice that the Director (through the Patent Trial and Appeal Board) could institute an IPR on less than all challenged claims and then limit the FWD to only the instituted claims. Just two days after the Supreme Court's decision, the U.S. Patent and Trademark Office issued Guidance regarding how the PTAB will apply the Court's mandate in SAS Institute. In particular, the Office noted that for all pending and future-filed petitions, the Board will institute on all challenged claims so long as the petitioner has shown a reasonable likelihood of invalidating at least one of the claims, and for cases where the Board has engaged the parties in partial institution proceedings, the Board "may" issue an order "supplementing the institution decision to institute on all challenges raised in the petition."

In June, the Supreme Court granted certiorari on Helsinn Healthcare's petition to overturn the Federal Circuit's decision in Helsinn Healthcare v. Teva Pharmaceuticals that its patents were invalid by application of the on-sale bar under 35 U.S.C. 102(b). The Question Presented in the petition was as follows:

Whether, under the Leahy-Smith America Invents Act, an inventor's sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.

The issue is specifically related to the question of whether the AIA changed the application of the on-sale bar. In December, the Supreme Court heard oral argument in this case. The Supreme Court's decision will likely land this case on our Top Stories list again next year.